Delhi Metro expansion unlikely to be funded by Japan

India’s metro rail expansion over the last two decades has, for the most part, been financed through soft loans from Japan. File photo: Mint

The next phase of the Delhi Metro expansion will, in all likelihood, not be funded by Japan.

“Delhi will soon have a metro network that is longer than Tokyo,” said a senior official of the Japanese International Cooperation Agency. “It doesn’t make sense for us to keep funding metro projects in India.”

When Delhi Metro’s Phase-III is launched in stages over the next few months, the national capital region will have a metro network spanning over 330km. The combined length of Tokyo’s metro lines is 195km.

“We also need a very good reason to continue to support,” the JICA official said, who chose not to be named.

“When Delhi Metro began in the 1990s, the technology was nascent and support was required. But Japan is no longer able to aggressively involve itself in metro projects. However, the extension of existing lines in Mumbai and Chennai are under active discussion.”

“We have an annual funding limit and the money should be spent on prioritised areas,” the official added.

Nine Indian cities currently have a metro network, with Lucknow joining the list recently.

Following the launch, UP chief minister Yogi Adityanath proposed to set up a UP Metro Rail Corporation to oversee metro construction in a string of new cities – Agra, Kanpur, Allahabad, and Varanasi.

Earlier in the year, Prime Minister Narendra Modi had said 50 Indian cities are ready for a metro network.

India’s metro rail expansion over the last two decades has, for the most part, been financed through soft loans from Japan.

In the case of Delhi, the share of Japanese assistance as a percentage of the total project cost has come down from 60% in Phase-I to 48.5% in the ongoing Phase-III.

Delhi Metro spokesperson Anuj Dayal said that a final approval for 104-km long Phase-IV of the project is pending with the ministry of urban development. “Funding call will be taken after the approval,” he said.

With the union government recently releasing a metro rail policy, which puts heavy emphasis on city’s finding private funders of their own – if 50 Indian cities want a metro network, they may have to start figuring out how to pay for it.

“Apart from central government sources or cheap foreign loans, I don’t see money coming from other sources,” said M. Ramachandran, former secretary of the ministry of urban development. “If cities go to the market, loans would come at a steep interest rate. That would make the eventual fares too expensive and no one would use the system.”